SCHEDULE 14A
INFORMATION REQUIRED IN PROXY STATEMENT
SCHEDULE 14A INFORMATION
Proxy Statement Pursuant to Section 14(a)
of the Securities Exchange Act of 1934
(Amendment No.)
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Filed by a party other than the Registrant [ ]
Check the appropriate box:
[ ] Preliminary Proxy Statement
[ ] Confidential, for Use of the Commission Only (as permitted by Rule
14a-6(e)(2))
[X] Definitive Proxy Statement
[ ] Definitive Additional Materials
[ ] Soliciting Material Pursuant to Rule 14a-11(c) or Rule 14a-12
Slade's Ferry Bancorp
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(Name of Registrant as Specified in Its Charter)
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(Name of Person(s) Filing Proxy Statement, if other than the Registrant)
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[X] No fee required
[ ] Fee computed on table below per Exchange Act Rules 14a-6(i)(1) and
0-11.
(1) Title of each class of securities to which transaction applies:
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(3) Per unit price or other underlying value of transaction computed
pursuant to Exchange Act Rule 0-11 (Set forth the amount on which
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[ ] Fee paid previously with preliminary materials.
[ ] Check box if any part of the fee is offset as provided by Exchange Act
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previously. Identify the previous filing by registration statement number, or
the Form or Schedule and the date of its filing.
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Slade's Ferry Bancorp
Notice Of
Annual Meeting of Stockholders
And
Proxy Statement
Date:
Monday, April 14, 2003
Time:
6:30 P.M.
Place:
Venus de Milo Restaurant
75 Grand Army Highway
Swansea, MA 02777
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YOUR VOTE IS VERY IMPORTANT
You are urged to exercise your right by indicating your choices on the
enclosed proxy card. Please date, sign, and promptly return your proxy card
in the enclosed postage-paid envelope. You may, nevertheless, vote in
person if you attend the meeting.
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March 10, 2003
Dear Stockholder,
You are cordially invited to attend the Annual Meeting of the
Stockholders of Slade's Ferry Bancorp to be held on Monday, April 14, 2003
at 6:30 p.m. at the Venus de Milo Restaurant, 75 Grand Army Highway,
Swansea, Massachusetts, 02777.
At the Annual Meeting we will review the activities of the past year
and you will be asked to vote upon (1) the election of five Class Two
Directors of the Corporation to serve for a three-year term, (2) the
election of a Clerk/Secretary of the Corporation, and (3) the ratification
of the selection of Shatswell, MacLeod & Co. as the Corporation's
independent auditors.
It is very important that your shares be represented, whether or not
you are able to attend. You are urged to read the enclosed Proxy Statement
and the accompanying materials. Please sign and return the enclosed proxy
in the postage-paid envelope provided at your earliest convenience,
regardless of the number of shares you own. If you attend the Annual
Meeting and wish to vote in person, you may withdraw the Proxy upon oral
request.
Your Board of Directors recommends that you vote FOR the election of
Thomas B. Almy, Peter G. Collias, Melvyn A. Holland, Shaun O'Hearn Sr., and
William J. Sullivan as Class Two Directors for a term of three years; FOR
the election of Peter G. Collias as Clerk/Secretary; and FOR the
ratification of Shatswell, MacLeod & Co. to act as the Company's
independent auditors.
Your Board of Directors has fixed the close of business on February
21, 2003 as the record date for the determination of stockholders entitled
to receive notice of and to vote at the Meeting and any adjournments
thereof.
We look forward to seeing as many stockholders as possible at this
meeting.
Sincerely,
/s/ Donald T. Corrigan
Donald T. Corrigan
Chairman of the Board
SLADE'S FERRY BANCORP, 100 Slade's Ferry Avenue, Somerset, Massachusetts 02726
TEL (508)675-2121 *** FAX (508)675-1751 *** www.sladesferry.com
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SLADE'S FERRY BANCORP
100 Slade's Ferry Avenue
Somerset, Massachusetts 02726
(508)675-2121
NOTICE OF ANNUAL MEETING OF STOCKHOLDERS
To the Holders of common stock of Slade's Ferry Bancorp
NOTICE IS HEREBY GIVEN that the 2002 Annual Meeting of Stockholders
of Slade's Ferry Bancorp will be held at the Venus de Milo Restaurant, 75
Grand Army Highway, Swansea, Massachusetts, on Monday, April 14, 2003 at
6:30 p.m. local time (the "Meeting") for the following purposes, all as set
forth in the attached Proxy Statement.
1. To elect five Class One Directors, each to hold office until
the 2006 Annual Meeting of the Stockholders of Slade's Ferry
Bancorp or special meeting of stockholders in lieu thereof, and
until his or her successor is elected and qualified.
2. To elect a Clerk/Secretary of the Corporation to hold office
until the next Annual Meeting of stockholders or special
meeting of stockholders in lieu thereof, and until his or her
successor is elected and qualified.
3. To ratify the Board of Directors' selection of Shatswell,
MacLeod & Company, P.C. to continue as our independent
certified public accountants for 2003.
4. To consider and act with discretionary authority upon such
business matters or proposals as may properly come before the
Meeting and any adjournments thereof.
Your Board of Directors has fixed the close of business on February
21, 2003 as the record date for the determination of stockholders entitled
to receive notice of and to vote at the Meeting and any adjournments
thereof.
Your attention is called to the accompanying Proxy Statement.
By Order of the Board of Directors,
/s/ Peter G. Collias
Peter G. Collias, Clerk/Secretary
Somerset, Massachusetts
March 10, 2003
IT IS IMPORTANT THAT YOUR SHARES BE REPRESENTED AT THE MEETING REGARDLESS
OF THE NUMBER OF SHARES YOU MAY HOLD. PLEASE FILL IN, SIGN AND DATE THE
ENCLOSED PROXY AND RETURN IT PROMPTLY IN THE ENCLOSED ENVELOPE WHICH
REQUIRES NO POSTAGE IF MAILED WITHIN THE UNITED STATES. IT IS IMPORTANT
THAT PROXIES BE MAILED PROMPTLY. IF YOU ATTEND THE MEETING, YOU MAY
WITHDRAW ANY PROXY GIVEN BY YOU AND VOTE YOUR SHARES IN PERSON.
3
SLADE'S FERRY BANCORP
100 Slade's Ferry Avenue
Somerset, Massachusetts 02726
(508)675-2121
PROXY STATEMENT
FOR THE
ANNUAL MEETING OF STOCKHOLDERS
April 14, 2003
Accompanying this Proxy Statement is a Notice of the Annual Meeting
of Stockholders of Slade's Ferry Bancorp to be held at the Venus de Milo
Restaurant, 75 Grand Army Highway, Swansea, Massachusetts, on Monday, April
14, 2003 at 6:30 p.m. local time. Also enclosed is a form of proxy for the
Meeting and any adjournment hereof. This Proxy Statement and the enclosed
form are furnished in connection with the solicitation of proxies by the
Board of Directors of the Corporation and are first being sent to
stockholders on or about March 10, 2003. The enclosed proxy is for the use
of holders of the Corporation's common stock, $.01 par value per share (the
"common stock"), of record at the close of business on February 21, 2003.
Shares cannot be voted at the Meeting unless the owner of record is present
to vote or is represented by proxy.
The solicitation of proxies will be by mail except that further
solicitation may be made in writing, by person, or by telephone contact
with some stockholders after the original mailing. Such further
solicitation will be made by regular employees of the Corporation who will
not be additionally compensated therefor. All the costs incurred in
connection with the solicitation of proxies will be paid by the
Corporation.
Date, Time and Place of Annual Meeting
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The Annual Meeting of Stockholders will be held at the Venus de Milo
Restaurant, 75 Grand Army Highway, Swansea, Massachusetts, on Monday, April
14, 2003 at 6:30 p.m. local time.
Purpose of the Annual Meeting
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The purpose of the Meeting is: (1) the election of five Class Two
Directors of the Corporation to serve for a three-year term, (2) the
election of a Clerk/Secretary of the Corporation, (3) the ratification of
the Board of Directors' selection of independent auditors, and to consider
and act with discretionary authority upon such other business matters or
proposals as may properly come before the Meeting and any adjournments
thereof.
Stockholders Entitled to Vote; Outstanding Shares
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The Board of Directors has fixed the close of business on February
21, 2003 as the record date (the "Record Date") for the determination of
stockholders entitled to receive notice of, and to vote at, the Meeting or
any adjournments thereof. Only holders of record of the Corporation's
common stock at the close of business on the Record Date will be entitled
to notice of, and to vote at, the Meeting or any adjournments thereof.
However, the legal representative of a deceased stockholder is entitled to
vote the shares owned of record by such deceased stockholder.
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At the close of business on the Record Date, there were 3,952,185.757
shares of the Corporation's common stock issued and outstanding. Each
stockholder is entitled to one vote for each share owned and a
proportionate vote for a fractional share. As of such date, there were
approximately 1,450 stockholders of record of the Corporation's common
stock.
PROPOSALS OF STOCKHOLDERS
Any proposals of stockholders intended to be presented at the next
Annual Meeting of Stockholders must be received by the Corporation at its
principal executive offices not later than November 17, 2003 for inclusion
in the Corporation's proxy statement and form of proxy relating to that
meeting. Any stockholder submitting such a proposal must be the record or
beneficial owner of at least $2,000 in market value of the Corporation's
common stock, have held such stock for at least one year and continue to
own such stock through the date on which the stockholders meeting is held.
A stockholder may submit no more than one proposal and an accompanying
statement of not more than 500 words for inclusion in the Corporation's
proxy materials. The Corporation assumes no responsibility for such a
proposal or the accompanying statement and may include an opposition
statement in the proxy statement if it so chooses. The Corporation may omit
proposals and any supportive statement under certain circumstances set
forth in SEC Rule 14a-8.
VOTING PROCEDURE
If you sign, date and return the enclosed proxy in time for the
Meeting, your shares will be voted (unless you otherwise instruct) on all
matters that may properly come before it. The proxy contains spaces in
which you may insert instructions as to how your shares are to be voted
with regard to each of the proposals. Your shares will be voted in
accordance with your instructions. If no instructions are specified, your
shares will be voted FOR the election as Directors of the nominees named
herein, FOR the election as Clerk/Secretary of the nominee named herein,
and FOR the ratification of the selected independent auditors.
Your proxy may be revoked at any time before it is exercised. Any
stockholder attending the Meeting may vote in person even though he/she may
have previously filed a proxy. Your proxy may be revoked by written notice
to the Corporation prior to the Meeting or at the Meeting in person prior
to a vote.
The presence, in person or by proxy, of at least a majority of the
total number of outstanding shares of common stock of the Corporation is
necessary to constitute a quorum for the transaction of business at the
Meeting. A quorum being present, the affirmative vote of a majority of the
shares present and voting, in person or by proxy, is necessary to approve
the election of the class of Directors to be elected, the election of a
Clerk/Secretary of the Corporation, and the ratification of the independent
auditors. Abstentions are treated as negative votes for purposes of
determining whether a majority vote has been received. Broker nonvotes are
not considered to be represented by proxy and are not taken into account.
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As of February 21, 2003, the Directors and Executive Officers of the
Corporation beneficially owned in the aggregate 713,889.550 (18.06%) of the
issued and outstanding shares of the Corporation's common stock which may
be voted at the Meeting.
PROPOSAL ONE
ELECTION OF CLASS TWO DIRECTORS
The Bylaws of the Corporation provide that the Board of Directors
must consist of at least seven but not more than twenty-five members. All
of the Directors must own a certain minimum value of the Corporation's
stock. The Corporation's Directors are divided into three approximately
equal classes which serve staggered three-year terms such that only one
class (approximately one-third of the Directors) is elected each year.
At the Meeting, stockholders of the Corporation are being asked to
elect five Class Two Directors of the Corporation to serve until the year
2006 Annual Meeting of Stockholders and until their successors are elected
or qualified.
The names of the nominees for Class Two Directors and certain
information concerning them are set forth below. All of the nominees are
currently Directors of the Corporation and each has consented to serve if
elected. If any nominee shall become unavailable for any reason, the shares
represented by the enclosed Proxy will be voted in favor of such other
person as the Board of Directors of the Corporation may at the time
recommend. The table lists the name of each nominee, his age, period of
service as a director of the Corporation (and Slade's Ferry Bank),
positions with the Corporation (and Slade's Ferry Bank), principal
occupation and other directorships held.
Positions Director
With Bancorp of Bancorp
Name and Bank and Bank Since Occupation
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<s> <c> <c> <c>
Thomas B. Almy Director 01/27/1964 Architect, Retired
958 Regan Road
Somerset, MA 02726
Age 68
Peter G. Collias Director 01/09/1973 Attorney - Law Office
254 French Street Peter G. Collias
Fall River, MA 02720
Age 71
Melvyn A. Holland Director 11/10/1997 CPA/Accountant
16 Hidden Bay Drive Treasurer
So Dartmouth, MA 02748 Rosenfield Raymon
Age 65 Restivo, PC
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Positions Director
With Bancorp of Bancorp
Name and Bank and Bank Since Occupation
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<s> <c> <c> <c>
Shaun O'Hearn, Sr. Director 11/10/1997 President -
1567 Gardners Neck Road Bolger & O'Hearn, Inc.
Swansea, MA 02777
Age 57
William J. Sullivan Director 09/10/1979 President & Director
388 New Boston Road Sullivan Funeral
Fall River, MA 02720 Homes, Inc
Age 63
The Board of Directors of the Corporation recommends that the
stockholders vote FOR the election of the five nominees as Directors of the
Corporation.
The other current members of the Board of Directors, together with
their class and the year in which their term expires, who are not up for
re-election at this meeting, are as follows:
2004 - CLASS THREE
<s> <c> <c> <c> <c>
Mary Lynn D. Lenz William Q. MacLean, Jr. Francis A. Macomber Majed Mouded, MD David F. Westgate
Four Longfellow Place 34 John Street 27 Cypress Road 111 Pontiac Road 47 Water Street
Boston, MA 02114 Newport, RI 02840 Somerset, MA 02726 Somerset, MA 02726 Mattapoisett, MA 02739
2005 - CLASS ONE
<s> <c> <c> <c> <c>
Donald T. Corrigan Lawrence J. Oliveira, DDS Peter Paskowski Kenneth R. Rezendes Sr Charles Veloza
95 Captain's Way 20 Holly Lane 409 Mount Hope Road 3 Sammy's Lane 100 Plymouth Blvd
Somerset, MA 02726 Mattapoisett MA 02739 Somerset, MA 02726 Assonet, MA 02702 Westport, MA 02790
2002 MEETINGS AND STANDARD FEE ARRANGEMENTS OF THE BOARD OF
DIRECTORS AND COMMITTEES OF THE BOARD
A regular meeting of the Board of Directors of the Bank is held each
month. Bancorp directors meetings are held quarterly and special directors
meetings are held when necessary. During 2002, the Board of Directors of
the Bank held twelve regular monthly meetings, three special meetings and
there were four quarterly Bancorp meetings. In addition to membership on
the Board, members may also serve on one or more standing committees or
subcommittees. The standing committees of the Bank include the Executive
Committee, Audit Committee, and Nominating Committee.
The Executive Committee met twenty-seven times, and generally acts on
most matters between meetings of the regular board. Its members are Donald
T. Corrigan, Chairman; Mary Lynn D. Lenz, William Q. MacLean Jr., Peter
Paskowski, Kenneth R. Rezendes, William J. Sullivan, and David F. Westgate.
In the event of extended absences occurring on the Executive Committee,
other directors serve as temporary replacements.
7
In addition to its other functions, the Executive Committee reviews
the compensation and benefits of the executives and officers of the
Corporation and the Bank and sets salaries and bonuses subject to the
approval of the Board of Directors. Ms. Lenz is excluded from any
discussions or decisions regarding Ms. Lenz's compensation.
The Audit Committee is responsible for matters relating to accounting
policies, financial reporting, and internal control. It recommends the
selection of independent auditors, reviews the Audit Plan and results of
the independent audit, and reviews the audit function practices and
findings of the Internal Audit Department. The Audit Committee held four
meetings during the past year. Its members are Melvyn A. Holland, Chairman;
William Q. MacLean, Jr.; Shaun O'Hearn, Sr.; and Lawrence J. Oliveira, DDS.
All of the members of the Audit Committee qualify as "independent" under
the definition in Rule #4200(a)(15) of the National Association of
Securities Dealers.
The Nominating Committee, which was formed in November 2002 and held
one meeting, provides advice and guidance to the Board of Directors
regarding the number, qualifications and performance of the Company's
Directors and, when necessary, recommends individuals to the Board for
election as Directors. The Committee also monitors the adequacy of the
Board's Structure, communications, and procedures and ensures that each
Director is informed and diligent regarding the fulfillment of his/her
duties. It is solely the responsibility of the Nominating Committee to
recruit individuals to serve as Directors whose qualifications meet the
organization's needs, and to recommend these individuals to the Board for
election as Directors.
The overall attendance at the regular board meetings and special
meetings was 90%. All of the Directors attended at least 80% of the total
meetings of the Board of Directors and their assigned committees except for
Dr. Mouded who attended 73% and Mr. Veloza who attended 54%.
FEE ARRANGEMENTS
Directors are paid $350.00 for each Bank Board of Directors meeting
attended and $300.00 for each Bancorp meeting attended. In addition,
Executive Committee members are paid $350.00 for each Executive Committee
meeting attended, and the Executive Committee Clerk is paid an annual fee
of $2,000.00. The Chairman of the Board of the Bank and the Bancorp is paid
$1,000.00 for each position, and the Vice Chairman of the Bancorp is paid
$2,000.00 for holding such position. The Corporate Secretary of the Bank is
paid an annual fee of $2,000.00, with an additional fee of $750.00 for
serving as Corporate Secretary for the Bancorp. Members of all other
committees receive $300.00 per meeting attended, a $250.00 annual fee for
serving on such committees, and the chairman of each committee receives
$500.00 annually for chairing such committees.
Each non-employee director receives an automatic grant each year of
an option for 2,000 shares of the Company's common stock under the
Automatic Grant Program of the Company's 1996 Stock Option Plan, (the
"Plan"). Options granted under the Automatic Grant Program are subject to
the terms and conditions of the Plan and are exercisable immediately at a
price per share equal to the market price on the date of grant.
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Through the purchase of $1.6 Million of directors paid-up life
insurance policies in 1999, each insurable member of the Board of Directors
is provided a death benefit of $100,000 providing the member has served 10
years or more on the board, and $50,000 to members that have less than 10
years of service. The policy also provides a retirement benefit to members
of the Board for each year following the director's retirement.
In addition, the Company, through its participation in the Employee
Group Term Life Insurance program, provides a death benefit of $50,000 life
insurance to each non-employee director up to age 65, then decreasing each
year thereafter to a base of $10,000 at age 75.
In 1999, the directors, officers and certain employees each received
one (1) share of Slade's Ferry Preferred Capital Corporation (SFPCC) 8%
Cumulative Preferred Stock, stated value of $500 per share.
AUDIT COMMITTEE CHARTER AND REPORT
Audit Committee Charter
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The Audit Committee operates pursuant to a Charter approved by the
Board of Directors, a copy of which is attached to this proxy statement as
Appendix A. The Charter sets out the responsibilities, authority, and
duties of the Audit Committee. The Charter specifies, among other things,
the structure, membership requirements, and the relationship of the Audit
Committee to the independent auditors and internal auditor.
Report of Audit Committee
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The Audit Committee's responsibilities include the oversight of the
Company's financial reporting process on behalf of the Board of Directors.
Management has the primary responsibility for the financial statements and
the reporting process including systems of internal controls, and
compliance with laws and regulations.
In fulfilling its oversight responsibilities, the Committee reviewed
with management and the independent auditors the audited financial
statements in the Annual Report. The independent auditors, who are
responsible for expressing an opinion on the conformity of the audited
financial statements with generally accepted accounting principles,
reviewed with the Committee their judgments as to the quality, not just
acceptability, of the Company's accounting principles and such other
matters that are required to be discussed with the Committee under
generally accepted auditing standards.
In addition, the Committee discussed with the independent auditors
matters required to be discussed by Statement on Auditing Standards No. 61
(Communication with Audit Committees).
The independent auditors also provided to the Committee the written
disclosures required by the Independence Standards Board, and the Committee
discussed with the independent accountants that firm's independence.
9
Based on the Committee's review and discussions referred to above,
the Committee recommended that the Board of Directors include the audited
consolidated financial statements in the Company's Annual Report on Form
10-K for the year end December 31, 2002.
The Committee and the Board have also recommended, subject to
shareholder approval, the selection of Shatswell MacLeod & Company, P.C. to
be the Company's independent auditors for year end 2003.
Audit Committee:
Melvyn A. Holland, Chairman
William Q. MacLean, Jr.
Shaun O'Hearn, Sr.
Lawrence J. Oliveira DDS
Cecelia Machado, Internal Bank Auditor
HONORARY DIRECTORS
In addition to the Board of Directors, the Corporation also has
Honorary Directors. To serve as an Honorary Director, a person must be a
former director. Currently, no individual serves as Honorary Director.
PROPOSAL TWO
ELECTION OF CLERK/SECRETARY
The Clerk of the Corporation is to be elected by the stockholders at
an annual meeting or special meeting duly called for that purpose. At the
Meeting, the stockholders of the Corporation are being asked to elect
Attorney Peter G. Collias, the nominee proposed by the Board of Directors,
as Clerk/Secretary of the Corporation to serve until the next Annual
Meeting of Stockholders, or special meeting in lieu thereof, and until his
successor is elected and qualified.
Mr. Collias is the principal in the law office of Peter G. Collias
and has been Clerk/Secretary of the Corporation since its inception and of
Slade's Ferry Bank since 1973.
The Board of Directors of the Corporation recommends that the
stockholders vote FOR the election of Attorney Peter G. Collias as
Clerk/Secretary of the Corporation.
PROPOSAL THREE
RATIFICATION OF INDEPENDENT AUDITORS
The Board of Directors of the Corporation has selected Shatswell,
MacLeod and Company, P.C. to continue as their independent certified public
accountants for 2003. Shatswell, MacLeod and Company, P.C. is expected to
have a representative available at the Annual Stockholders Meeting, who
will have the opportunity to make a statement if desired and will be
available to respond to appropriate questions.
10
At the meeting, stockholders of the Corporation are being asked to
ratify the Board of Directors' selection of Shatswell, MacLeod & Company,
P.C. to continue as our independent certified public accountants for 2003.
The Board of Directors of the Corporation recommends that the
stockholders vote FOR the ratification of Shatswell, MacLeod & Company,
P.C. as independent auditors.
DIRECTORS AND EXECUTIVE OFFICERS
The Corporation, as the holding company for Slade's Ferry Bank, has
the same Board of Directors as the Bank and its executive officers are some
of the same executive officers employed by the Bank. The following table
sets forth certain information about the directors and executive officers
of the Corporation and the Bank.
Bank and
Director Corporation
of Bank Term Position or Office with
Name Age Since Expires the Bank and the Corporation
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<s> <c> <c> <c> <c>
Thomas B. Almy 68 1964 2003
Peter G. Collias 71 1973 2003 Secretary and Clerk of Bank and of the
Corporation
Donald T. Corrigan 72 1959 2005 Retired; Chairman of the Board of the Bank
and of the Corporation
Melvyn A. Holland 65 1997 2003
Mary Lynn D. Lenz 47 2002 2004 President and Chief Executive Officer of the
Bank and of the Corporation
William Q. MacLean, Jr. 68 1997 2004
Francis A. Macomber 71 1980 2004
Majed Mouded, MD 61 1993 2004
Shaun O'Hearn, Sr. 57 1997 2003
Lawrence J. Oliveira, DDS 57 1997 2005
Peter Paskowski 79 1971 2005 Retired; former President and Executive Vice
President of the Bank
Kenneth R. Rezendes, Sr. 69 1978 2005 Vice Chairman of the Corporation
11
Bank and
Director Corporation
of Bank Term Position or Office with
Name Age Since Expires the Bank and the Corporation
- ----------------------------------------------------------------------------------------------------------
<s> <c> <c> <c> <c>
William J. Sullivan 63 1985 2003
Charles Veloza 77 1979 2005
David F. Westgate 62 1997 2004
James H. Amidon 54 Vice President of Asset Quality Control;
CRA/Compliance Officer; and Security
Officer of the Bank
Edward Bernardo Jr. 52 ---- ---- Vice President and Treasurer of the Bank;
Treasurer of the Corporation; Chief
Financial Officer and Chief Accounting
Officer of the Bank and the Corporation
Joseph Gesualdo 49 ---- ---- Vice President of Credit Risk Administration
of the Bank
Susan R. Hajder 55 ---- ---- Senior Vice President and Operations Officer
of the Bank
Carol A. Martin 56 ---- ---- Senior Vice President of the Bank
Donna Sosnowski 48 ---- ---- Senior Vice President/Corporate Services
of the Bank
Manuel J. Tavares 55 ---- ---- Senior Vice President and Senior Lending
Officer of the Bank
The following is a description of the business experience during the
last 5 years of the Directors and Executive Officers:
Thomas B. Almy: Architect with I. T. Almy Associates of Somerset,
Massachusetts since 1963.
Peter G. Collias: Attorney with law firm of Peter G. Collias since 1992.
Donald T. Corrigan: Chairman of the Board of Directors of the Bank since
1984 and of the Corporation since March 12, 1996. Retired Rear Admiral U.S.
Navy Reserve; Incorporator U.S.S. Massachusetts Memorial; Associate
Charlton Memorial Hospital; member of Board of Directors of St. Anne's
Hospital of Fall River; member of Economic Development Committee of the
Town of Somerset, and Managing Partner of Narry Boats LLC of Bristol, RI.
Melvyn A. Holland: Treasurer at Rosenfield Raymon Restivo PC, Certified
Public Accountants of
12
New Bedford, Massachusetts, since prior to 1994.
Mary Lynn D. Lenz: President and Chief Executive Officer of the Bank since
September 9, 2002. President and Chief Executive Officer of the Corporation
since November 12, 2002. Executive Vice President, Director of Retail
Banking at Citizens Bank of Massachusetts from 1998 to 2002. Vice President
of National Small Business Regional Sales at Key Bank of Buffalo, New York
from 1996 to 1998. Employed by Key Bank of Buffalo from 1989 to 1998.
William Q. MacLean, Jr.: Account Executive of Sylvia Group in New Bedford,
Massachusetts since prior to 1994. President/Founder of MacLean Consulting,
Inc., a general business consulting company in Boston, Massachusetts.
Francis A. Macomber: President, Treasurer and a Director of LeComte's
Dairy of Somerset, Massachusetts since prior to 1994.
Majed Mouded, MD: Physician and endocrinologist, on active staff at St.
Anne's Hospital in Fall River, Massachusetts since prior to 1994.
Shaun O'Hearn, Sr.: President of Bolger & O'Hearn, Inc., a color and
chemicals company in Fall River, Massachusetts, since prior to 1994.
Lawrence J. Oliveira, DDS: Orthodontist from New Bedford and Mattapoisett,
Massachusetts since prior to 1994.
Peter Paskowski: President of the Bank from January 1, 1988 until his
retirement on June 30, 1988 and Executive Vice President of the Bank from
1984 to 1987.
Kenneth R. Rezendes, Sr.: Chairman of the Board of K. R. Rezendes, Inc., a
heavy construction firm, since 1967. President of K. R. Rezendes, Inc. from
1965 to 1997. President of K. R. Management Corp., President and Chief
Executive Officer of the Corporation from March 12, 1996 to November of
2002. Vice Chairman of the Corporation since November 12, 2002.
William J. Sullivan: President and Director of Sullivan Funeral Homes,
Inc. of Fall River and Somerset, Massachusetts since prior to 1994.
Charles Veloza: Past President and Director of Charlie's Oil Co., a
heating and fuel oil distribution business of Fall River, Massachusetts
since prior to 1994.
David F. Westgate: President of Quequechan Management Corp., a management
consulting firm in Fall River, Massachusetts since prior to 1994.
James H. Amidon: Vice President of Asset Quality Control; Compliance
Officer; Community Reinvestment Act Officer; Security Officer. Employed by
the Bank since 1989.
Edward Bernardo, Jr.: Chief Financial Officer, Chief Accounting Officer,
and Treasurer of the Bank
13
and Corporation since April 2000; Vice President of the Bank since 1996.
Joseph Gesualdo: Vice President of Credit Risk Administration. Employed by
the Bank since 1996.
Susan R. Hajder: Senior Vice President of the Bank since 1990 and
Operations Officer of the Bank since 1986. Employed by the Bank since 1973.
Carol A. Martin: Senior Vice President of the Bank since 1996 and Branch
Administrator of the Bank from 1989 to 2002. Employed by the Bank since
1963.
Donna Sosnowski: Senior Vice President of the Bank since January 13, 2003.
Senior Vice President of Human Resources at Citizens Bank of Massachusetts
from 2000 to 2002; Vice President of Human Resources at USTrust from 1997
to 2000.
Manuel J. Tavares: Senior Vice President and Senior Lending Officer of the
Bank since 1989. Employed by Bank since 1987.
SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT
The following table sets forth information concerning beneficial
ownership of the Corporation's common stock by each Director, Honorary
Director and nominee of the Corporation, by certain executive officers and
by the executive officers and directors as a group as of December 31, 2002.
Beneficial ownership includes any shares that the individual has the right
to acquire within 60 days of February 28, 2003 through the exercise of an
option.
Name and Address Amount and Nature of Percent
of Beneficial Owner Beneficial Ownership of Class
- ---------------------------------------------------------------
Directors and Nominees:
<s> <c> <c>
Thomas B. Almy 73,650.000(1) 1.81
958 Regan Road
Somerset, MA 02726
Peter G. Collias 26,109.040(2) .64
254 French Street
Fall River, MA 02720
Donald T. Corrigan 72,049.003(3) 1.77
95 Captain's Way
Somerset, MA 02726
14
Name and Address Amount and Nature of Percent
of Beneficial Owner Beneficial Ownership of Class
- ---------------------------------------------------------------
<s> <c> <c>
Melvyn A. Holland 8,946.172 .22
16 Hidden Bay Drive
So. Dartmouth, MA 02748
Mary Lynn D. Lenz 343.509 .01
Four Longfellow Place #3405
Boston, MA 02114
William Q. MacLean, Jr. 28,280.322(4) .70
34 John Street
Newport, RI 02840
Francis A. Macomber 119,269.080(5) 2.93
27 Cypress Road
Somerset, MA 02726
Majed Mouded, MD 69,087.105(6) 1.70
111 Pontiac Road
Somerset, MA 02726
Shaun O'Hearn, Sr. 14,832.107(7) .37
1567 Gardners Neck Road
Swansea, MA 02777
Lawrence J. Oliveira, DDS 36,979.981(8) .91
20 Holly Lane
Mattapoisett, MA 02739
Peter Paskowski 33,352.000(9) .82
113 Cusick Lane
Somerset, MA 02726
Kenneth R. Rezendes, Sr. 157,285.436(10) 3.86
3 Sammy's Lane
Assonet, MA 02702
William J. Sullivan 49,580.320(11) 1.22
388 New Boston Road
Fall River, MA 02720
15
Name and Address Amount and Nature of Percent
of Beneficial Owner Beneficial Ownership of Class
- ---------------------------------------------------------------
<s> <c> <c>
Charles Veloza 136,110.000 3.34
100 Plymouth Blvd.
Westport, MA 02790
David F. Westgate 10,617.974 .26
47 Water Street
Mattapoisett, MA 02739
<FN>
NOTES:
<F1> Includes 55,020.000 shares held jointly with Mr. Almy's wife.
<F2> Includes 8,285.096 shares held jointly with Mr. Collias' wife.
<F3> Includes 1,158.943 shares held by spouse, 519 shares held with
another family member, 3,823.912 shares held as custodian for other
family members, and 15,479.148 shares held as cotrustee in trust for
other family members, 2,000 shares held in IRA with A. G. Edwards as
custodian, and 5,573 shares held through brokers.
<F4> Includes 17,875.602 shares held in revocable trust.
<F5> Includes 5,757.895 shares held by a pension trust of LeComte's Dairy;
95,931.050 shares held in revocable trust; and 5,350.667 shares held
as custodian for other family members, and 1,509.665 held with spouse
as custodian for other family members.
<F6> Includes 51,937.041 shares held jointly with Dr. Mouded's wife, and
5,584.366 shares held by wife jointly with child.
<F7> Includes 345.235 shares held jointly with Mr. O'Hearn's wife;
3,897.104 shares held by a pension plan of Bolger & O'Hearn; and
2,352 shares held through broker.
<F8> Includes 19,590.656 shares held by a pension plan of Lawrence J.
Oliveira DDS P.C; and 9,064.892 shares held through broker.
<F9> Includes 16,537 shares held jointly with Mr. Paskowski's wife.
<F10> Includes 78,965.690 shares held in IRA with Dean Witter Reynolds as
custodian.
<F11> Includes 19,339.663 shares held jointly with Mr. Sullivan's wife and
598.144 shares held jointly with children.
</FN>
Executive Officers:
<s> <c> <c>
Mary Lynn D. Lenz See Above See Above
Kenneth R. Rezendes, Sr. See Above See Above
Manuel J. Tavares 10,771.622 .26
All Executive Officers and 847,363.671 shs 20.82%
Directors as a Group
SECTION 16(a) BENEFICIAL OWNERSHIP REPORTING COMPLIANCE
The directors and executive officers of the Corporation became
subject to the reporting requirements of Section 16 of the Securities
Exchange Act of 1934 as a result of the required registration of the
Corporation's common stock under that Act. Regulations under the Act
Require
16
that each director and executive officer file initial reports of
beneficial holdings of the Corporation's securities, periodic reports of
any changes in beneficial holdings and annual reports except where all
required transactions have previously been reported. All of the required
reports have been filed with the SEC, with only one late filing of a Form 4
on a single transaction for Mr. Corrigan.
COMPENSATION COMMITTEE REPORT ON EXECUTIVE COMPENSATION
A structured compensation system is in place at the Bank. Each
position has been scored using a point factor analysis system. Jobs with
similar point totals, indicating similar levels of responsibility and
authority, have been grouped together. Salary ranges have been assigned to
these job groupings. Officers' evaluations are based upon performance to
established standards, the standards having been written into each job
description. This measurement to standards then dictates the level of merit
increase proposed for each officer within guidelines set forth annually.
The adequacy of the salary ranges and each officer's current
compensation level is tested annually through the use of competitive market
data. The Bank currently uses a Banking Compensation Report, produced by an
independent consulting company. In 2002, there were 143 participants in the
entire survey. The Bank's current peer group are those institutions with
assets of $250 Million to $399.9 Million. The Bank's data is included in
this survey, along with twenty-nine other institutions.
Each officer position is reviewed annually and compared against
competitive market data. This information is analyzed by the Executive
Committee whereby each officer's performance and merit increase
recommendations are presented.
The Executive Committee, excluding Ms. Lenz, reviews the performance
of the President/Chief Executive Officer of the Bank. This review is
qualitative in nature and takes into consideration such factors as overall
performance of the Bank, improvement in shareholder value, preservation and
constant enhancement of the corporate image, including the Bank's
leadership and involvement in the community, efficient use of financial and
human resources, and the overall financial performance of the Bank. The
President's salary is tested against the market data noted above.
Bonuses are predicated on the achievement of the current year's
budgeted earnings as established independently by the Finance Committee.
The bonus is applied if the target earnings level is obtained and adjusted
incrementally if the earnings fall below target. The target excludes
extraordinary income and expense items and gains or losses recognized on
the sale of securities.
The Executive Committee also awards stock options to officers as
provided for by the Stock Option Plan under the Discretionary Grant
Program. In making any determinations as to persons to whom options are
granted and the number of stock options granted, the Committee takes into
account the duties of the respective individual, their contribution to the
success of the Company during the year, and such other factors as the
Committee deems relevant.
17
The Bank's Chief Executive Officer's compensation in 2002 reflected
the overall performance of Ms. Lenz since her appointment on September 9,
2002, and is supported by the expansion of the Bank's customer base, and
the overall quality and growth of the Company's assets.
Prior to 1998, the Company maintained a Defined Benefit Pension Plan,
which provided retirement benefits to each eligible officer and employee.
As of December 31, 1997, the Company elected to curtail this plan and in
turn establish a profit sharing type retirement plan effective January 1,
1998.
EXECUTIVE COMPENSATION TABLES AND INFORMATION
The following table sets forth the dollar value of all compensation
paid during the last three fiscal years to the Company's and the Bank's
highest paid executive officers including the Chief Executive Officer,
whose compensation exceeded $100,000:
SUMMARY COMPENSATION TABLE
Long Term
Annual Compensation Compensation
------------------------------ ------------
Restricted
Directors Stock Securities All Other
Name and Salary Bonus Fees Awards Underlying Compensation(8)
Principal Position(1) Year $ $ $ $ Options/Shs $
- --------------------- ---- ------ ----- --------- ---------- ----------- ---------------
<s> <c> <c> <c> <c> <c> <c> <c>
Mary Lynn D. Lenz 2002 59,231 15,000 0 0 0 34,072(2)
President/CEO -
Bank & Bancorp
Donald T. Corrigan 2002 0 0 24,900(3) 0 2,000 61,013(4)
Chairman of the Board -
Bank and Bancorp
Manuel J. Tavares 2002 119,940 6,000 0 0 0 7,525(5)
Senior Vice President 2001 119,940 8,500 0 0 1,500 7,102(5)
Senior Lending Officer - 2000 107,327 0 0 0 1,500 6,774(5)
Bank
Kenneth R. Rezendes, Sr. 2002 0 0 25,750(3) 0 2,000 422(6)
Vice Chairman-Bancorp 2001 0 0 19,550(3) 0 2,000 718(6)
2000 0 0 18,100(3) 0 2,000 692(4)
James D. Carey 2002 72,692 0 0 0 0 238,935(7)
Former President/ 2001 210,000 17,000 0 0 2,000 22,398(7)
CEO - Bank 2000 200,000 0 0 0 2,000 21,440(7)
Former Exec Vice
President - Bancorp
18
<FN>
<F1> Mr. Carey retired as President and Chief Executive Officer of the
Bank on March 29, 2002. Mr. Corrigan served as Acting President of
the Bank until Mary Lynn D. Lenz was elected as President and Chief
Executive Officer of the Bank on September 9, 2002. Mr. Rezendes was
President and Chief Executive Officer of the Company until November
12, 2002 when he was succeeded by Mary Lynn D. Lenz.
<F2> Includes $26,100 for consulting services provided from 8/5/02 to
9/16/02, $335 for personal use of bank owned automobile, $852 tax-
effected value of Slade's Ferry Preferred Capital Corporation
preferred stock, and $6,785 for legal services regarding employment
issues.
<F3> Directors' fees (See Fee Arrangements, Page 8).
<F4> Includes $17,937 compensation for services provided in 2002 while
Interim President, $37,822 annual contribution from and allocation to
Supplemental Executive Retirement Plan, $309 insurance premiums for
directors' life insurance, and $4,945 for appraisal services.
<F5> Includes $6,142, $5,687, and $5,266 accrual in 2002, 2001, and 2000
respectively in connection with the Supplemental Executive Retirement
Plan (SERP) entered into with Mr. Tavares in 1996, which provides for
the payment to Mr. Tavares upon his retirement of $1,500 per month
for 120 months, executive life insurance premiums of $387, $488, and
$550 for 2002, 2001, and 2000 respectively; and benefit for personal
use of bank owned automobile of $996, $927, and $958 for 2002, 2001,
and 2000 respectively.
<F6> Represents premium for directors' life insurance of $422, $718, and
$692 for 2002, 2001, and 2000 respectively.
<F7> Includes $160,000 ($85,000 paid in 2002, $75,000 accrued, to be paid
in 2003) for compensation per the severance agreement entered into
with Mr. Carey in 2002. Also included $78,255, $20,144, and $18,652
accrual in 2002, 2001, and 2000 respectively in connection with the
Supplemental Executive Retirement Plan(SERP) entered into with Mr.
Carey in 1995, which provides for the payment to Mr. Carey upon
reaching the age of 65 of $3,000 per month for 108 months, insurance
premiums for directors' life and executive life insurance of $97,
$1,235, and $1,779 in 2002, 2001, and 2000 respectively; and benefit
for personal use of bank owned automobile of $583, $1,019, and $1,009
for 2002, 2001, and 2000 respectively.
<F8> Additional compensation benefits will accrue under the Company's
Profit Sharing Plan established in 1998 under the formula which
allocates five (5) units for each $1,000 of compensation and one (1)
unit for each full year of service with the Company. The Plan was
adopted in 1998 and contributions to the Plan consisted of $300,000
in 2002, $300,000 in 2001, $150,000 in 2000. Contributions to the
Plan are determined each year by the Board of Directors.
</FN>
Stock Options Granted in 2002
The following table illustrates certain information for the Executive
Officers named regarding stock option grants made in 2002under the
Company's 1996 Stock Option Plan (the "Plan").
Individual Grants
Number of % of Total Potential Realizable Value
Securities Options At Assumed Annual Rate of
Underlying Granted Exercise Price Stock Price Appreciation
Options to Employees in Per Share Expiration for Option Term(2)
Name Granted(3)(4) 2002 ($/sh)(3) Date 5% 10%
- ---- ------------- --------------- -------------- ---------- -- ---
<s> <c> <c> <c> <c> <c> <c>
Donald T. Corrigan 2,000(1) 07.14% $14.15 4/10/07 $4,940 $12,220
Kenneth R. Rezendes 2,000(1) 07.14% $14.15 4/10/07 $4,940 $12,220
<FN>
<F1> Options granted to Mr. Corrigan and Mr. Rezendes are awarded under
and are subject to the terms and conditions of the Automatic Grant
Program of the Plan which provides that an option for 2,000 shares be
granted each plan year
19
to each eligible nonemployee director of the Corporation. These
options are exercisable immediately at a price per share equal to the
market price on the date of grant.
<F2> The dollar amounts under these columns are the results of
calculations at the 5% and 10% rate required by the SEC and therefore
are not intended to forecast possible future appreciation, if any, of
the stock price for options expiring on April 10, 2007. The Company's
per share stock price would be $16.62 and $20.26 if increased 5% and
10% respectively, compounded annually over the remaining life of the
stock options, based on the closing price per share of $13.50 at
December 31, 2002.
<F3> The number of shares underlying outstanding options granted under the
Plan and the exercise price of those options are subject to
adjustment to reflect any stock split, stock dividend, or other
changes in capitalization affecting the outstanding common stock.
<F4> In 2002, there were no incentive stock options awarded under and
subject to the terms and conditions of the Discretionary Grant
Program of the Plan.
</FN>
The following table presents certain information for the named
executive officers relating to the exercise of stock options and stock
appreciation rights ("SARs") during 2002 and, in addition, information
relating to the value of unexercised stock options. In 2002, underlying
options previously granted and due to expire in April 2002 were exchanged
for SARs and exercised. This action was approved by the Board of Directors.
Aggregated Option/SAR Exercises in the Last Fiscal Year
And Fiscal Year-end Option/SAR Values
Number of Securities Value of Unexercised In-The-
Underlying Unexercised Money Options at
# Securities Options at 12/31/02 12/31/02 (1)
Underlying Value ---------------------------- ----------------------------
Options/SARs Realized Exercisable Unexercisable Exercisable Unexercisable
Exercised ($) # # $ $
------------ -------- ----------- ------------- ----------- -------------
<s> <c> <c> <c> <c> <c> <c>
James D. Carey 6,100 $20,919.00 0 0 0 0
Donald T. Corrigan 2,205 $12,502.00 10,200 0 $16,344.00 0
Kenneth R. Rezendes 0 0 10,200 0 $16,344.00 0
Manuel J. Tavares 0 0 6,150 0 $12,258.00 0
<FN>
<F1> The value of unexercised In-The-Money Options is expressed as the
market value of the common stock at December 31, 2002 at $13.50 per
share over the exercise price of each option.
</FN>
RETIREMENT BENEFITS
Prior to 1998, the Company maintained a Defined Benefit Pension Plan
which provided retirement benefits to each established officer and
employee. An employee must have been age 21 and have served with the
Company one (1) full year of service to have been eligible. The annual
benefits formula for normal retirement age of 65 provided for 1.5% of total
salary plus .5% of compensation in excess of integration level per year of
service.
The following table illustrates the estimated retirement benefit
payable to eligible officers and employees upon retirement at age 65 in
various salary groups with various years of services.
20
PENSION PLAN TABLE
Years of Service
- ---------------------------------------------------------------------------
Remuneration 15 Yrs 20 Yrs 25 Yrs 30 Yrs 35 Yrs
- ---------------------------------------------------------------------------
<s> <c> <c> <c> <c> <c>
$100,000 $29,325 $39,100 $48,875 $58,650 $ 68,425
$125,000 $36,825 $49,100 $61,375 $73,650 $ 85,925
$150,000 $44,325 $59,100 $73,875 $88,650 $103,425
$175,000 $47,325 $63,100 $78,875 $94,650 $110,425
$200,000 $47,325 $63,100 $78,875 $94,650 $110,425
$225,000 $47,325 $63,100 $78,875 $94,650 $110,425
$250,000 $47,325 $63,100 $78,875 $94,650 $110,425
The benefits shown in the Pension Plan Table are based on a formula
of 1.5% of compensation per year plus .5% of compensation in excess of
$9,000 per year. The maximum years of service considered for benefit
purposes is 35. Annual compensation for benefits is capped at $160,000, per
Internal Revenue Code Section 401(a)(17). Benefits shown are payable as a
life annuity at age 65 and will not be subject to reductions because of
social security benefits. The life annuity is the Normal Form as defined by
the Plan document. Employees who had worked over 1000 hours in the twelve-
month period beginning on their date of hire and had attained age twenty-
one were eligible to participate in the Plan as of the next January 1 or
July 1, the Plan entry dates. The Plan covered all employees who met the
eligibility provisions, except employees covered by a collective bargaining
agreement and non-resident aliens. In addition, benefit accruals and Plan
participation were frozen by amendment effective December 31, 1997. The
years of credited service as of January 1, 1998 for the executive officers
named on the Summary Compensation Table who are eligible for retirement
benefits are as follows: James D. Carey - 10 Years; and Manuel J. Tavares -
11 years.
As of December 31, 1997, the Company elected to curtail the Employees
Defined Benefit Pension Plan. This decision was based on the costs
associated with the Defined Benefit Plan, and the complexities of the
marketability of the Plan to its employees. The Company in turn has
established a profit sharing type retirement plan effective January 1,
1998, which provides the employee with full investment direction of the
funds allocated to his or her account. The contribution by the Company to
the new Profit Sharing Plan is an amount to be fixed each year by the Board
of Directors. The amount allocated to each employee is based on a formula
that provides five (5) units for each $1,000 of compensation, and one (1)
unit for each full year of service with the Company. The grand total of
units of all eligible employees then becomes the denominator for the
allocation of the contribution to each employee's account. At December 31,
2002, the Defined Benefit Plan was underfunded. Although it is dependent
upon market conditions, it is currently estimated that the Plan's assets
will earn sufficient income in the next five to seven years to become fully
funded. Upon reaching a fully funded status, each participant's lump sum
value of the December 31, 1997 accrued benefit will be distributed from the
Defined Benefit Plan. The participant will be given the option of rolling
over their Defined Benefit Plan benefit into the new Profit Sharing Plan.
21
The Company also provides a 401K Plan which is available to eligible
employees who attain age 21 and complete three months of service. The
Company contributes a discretionary amount as determined by the Board of
Directors to the 401K Plan.
EMPLOYMENT CONTRACTS, TERMINATION OF EMPLOYMENT AND CHANGE-
IN CONTROL ARRANGEMENTS
In 1995, the Company entered into a Supplemental Executive Retirement
Agreement (SERP) with Mr. Carey which provided for a payment to Mr. Carey
upon his retirement of $2,500 per month for 120 months and further provided
for payment of lifetime medical insurance coverage for Mr. Carey and his
wife. Effective January 1, 1999, the agreement was amended to provide Mr.
Carey with $3,000 per month for 120 months upon his retirement, and amended
again in 2002 to 108 months upon reaching the age of 65. Upon Mr. Carey's
retirement in March 2002, the provision for medical coverage under the SERP
was deleted and payments under a separate severance agreement commenced. As
a condition of the agreement, Mr. Carey is required not to compete with the
Corporation or the Bank, either while employed or while receiving benefits
under the Agreement.
In 1996, the Bank entered into a substantially identical Supplemental
Executive Retirement Agreement (SERP) with Mr. Tavares, which provides a
payment to Mr. Tavares of $1,500 per month for 120 months upon his
retirement. It is anticipated that the Company will enter into a
Supplemental Executive Retirement Agreement with Ms. Lenz in 2003,
substantially similar to the agreement with Mr. Carey prior to its
amendment in 2002, and into a Change of Control Severance Agreement with
Ms. Lenz in 2003, providing for certain payments and benefits to her under
certain circumstances in the event of a severance of employment following a
Change of Control of the Company or the Bank.
COMPENSATION COMMITTEE INTERLOCKS AND INSIDER PARTICIPATION
The Executive Committee of the Company's Board of Directors, which
functions as the Compensation Committee, during 2002 included among others:
Kenneth R. Rezendes, Sr., James D. Carey, Mary Lynn D. Lenz, and Donald T.
Corrigan. Mr. Rezendes is currently the Vice Chairman of the Company, and
is the former President and Chief Executive Officer of the Company. Mr.
Carey retired as President and Chief Executive Officer of the Bank and
Executive Vice President of the Company on March 29, 2002. Mr. Corrigan,
Chairman of the Board, served as Acting President of the Bank from March
29, 2002 until the appointment of Ms. Lenz on September 9, 2002. Ms. Lenz
is currently the President and Chief Executive Officer of the Company and
the Bank. Mr. Corrigan is currently the Chairman of the Board of the
Company and the Bank and is the former President and Chief Executive
Officer of the Company and the Bank.
22
STOCK PERFORMANCE COMPARISON
The following graph compares the performance of the Company for the
periods indicated with the performance of the NASDAQ Stock Market and the
performance of a group of banks in the $250 Million to $500 Million index
assuming reinvestment of dividends.
Slade's Ferry Bancorp
Period Ending
--------------------------------------------------------------------
Index 12/31/97 12/31/98 12/31/99 12/31/00 12/31/01 12/31/02
- --------------------------------------------------------------------------------------------------
<s> <c> <c> <c> <c> <c> <c>
Slade's Ferry Bancorp 100.00 93.00 74.31 68.00 115.32 105.38
NASDAQ - Total US* 100.00 140.99 261.48 157.42 124.89 86.33
SNL $250M-$500M Bank Index 100.00 89.55 83.31 80.22 113.97 146.96
<FN>
*Source: CRSP, Center for Research in Security Prices, Graduate School of
Business, The University of Chicago 2002. Used with permission.
All rights reserved. crsp.com.
</FN>
SNL Securities LC (804) 977-1600
(c) 2003
23
INDEPENDENT PUBLIC ACCOUNTANTS
The Board of Directors of the Corporation has selected Shatswell,
MacLeod and Company, P.C. to continue as their independent certified public
accountants for 2003. This selection will be presented to shareholders for
ratification at the Annual Meeting. Shatswell, MacLeod and Company, P.C. is
expected to have a representative available at the Annual Stockholders
Meeting, who will have the opportunity to make a statement if desired and
will be available to respond to appropriate questions.
CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
Certain of the Corporation's and Bank's directors, executive
officers, and members of their families are at present, as in the past,
customers of the Bank and have transactions with the Bank in the ordinary
course of business. In addition, certain of the directors are at present,
as in the past, also directors, officers, or stockholders of corporations,
trustees of trusts, or members of partnerships which are customers of the
Bank, and which have transactions with the Bank in the ordinary course of
business. Such transactions with the directors, executive officers, members
of their families and with such corporations, trusts, and partnerships were
on substantially the same terms, including rates and collateral, as those
prevailing at the time for comparable transactions with other persons and
did not involve more than normal risk of collectability, or present other
features unfavorable to the Bank.
During the fiscal year ended December 31, 2002 and in prior years,
the Corporation and/or the Bank retained the legal services of Peter G.
Collias, Esq. a director and Clerk/Secretary of the Bank and Bancorp; and
the legal services of Thomas H. Tucker, Esq., who is the son-in-law of
Donald T. Corrigan, a director and Chairman of the Board. The Bank utilized
in 2002 the services of Director Thomas B. Almy of I. T. Almy Associates
for appraisal, architectural and related services, and the appraisal
services of Donald T. Corrigan and Peter Paskowski. Various goods and
materials were also purchased from Charlie's Oil Company, of which Director
Charles Veloza is Past President; and from LeComte's Dairy, of which
Director Francis A. Macomber is President. Also in 2002, consulting
services were provided by David F. Westgate, President of Quequechan
Management Corp., and Mary Lynn D. Lenz for the two months prior to her
appointment in September as President and Chief Executive Officer. None of
these relationships or transactions involved an amount of over $60,000.
ADDITIONAL MATTERS
The Annual Report of the Corporation for the fiscal year ended
December 31, 2002, including financial statements, is enclosed herewith.
As of the date of this Proxy Statement, management knows of no
matters that will be presented for determination at the annual meeting
other than those referred to herein. If any other matters properly come
before the annual meeting calling for a vote of stockholders, it is
intended that the shares represented by the proxies solicited by the Board
of Directors will be voted by the persons named therein in accordance with
their best judgements.
24
HOUSEHOLDING OF MATERIALS
Pursuant to a notice sent by the Company to its eligible
shareholders, the Company sent only one copy of this Proxy Statement and
Annual Report to those households in which multiple shareholders shared the
same address, unless the Company received instructions from a shareholder
requesting that they receive separate copies of these materials. If you are
a shareholder who shares the same address as other shareholders of the
Company and would like to receive a separate copy of this Proxy Statement
or Annual Report, or of future proxy statements, information statements,
and annual reports, please contact Shareholder Services at (800) 643-7537
(MA and RI only) or (508) 675-2121, or by writing to Slade's Ferry Bancorp,
Shareholder Services, 100 Slade's Ferry Avenue, Somerset, MA 02726.
By Order of the Board of Directors,
/s/ Peter G. Collias
Peter G. Collias
Clerk/Secretary
Dated: March 10, 2003
25
APPENDIX A
REVISED CHARTER
AUDIT COMMITTEE OF THE BOARD OF DIRECTORS
SLADE'S FERRY TRUST COMPANY
(Approved November 12, 2002)
I. Audit Committee
---------------
The Audit Committee of the Board of Directors shall be composed of at a
minimum three Directors who are independent of Management and are free of
any relationship that, in the opinion of the Board of Directors, would
interfere with their exercise of independent judgment as a Committee
member. Each Audit Committee member must be able to read and understand
fundamental financial statements. At least one Committee member must be a
"financial expert", i.e., have past employment experience in finance or
accounting, requisite professional certification in accounting, or other
comparable experience or background. Audit Committee members may enhance
their familiarity with finance and accounting by participating in
educational programs conducted by the Bank or through outside programs.
Audit Committee members and the Committee Chairman shall be appointed by
the Chairman of the Board. If an Audit Committee Chair is not designated or
present, the members of the Committee may designate a Chair by majority
vote of the Committee membership.
Independence
------------
A director will not be considered "Independent" if, among other things, the
director has:
* Been employed by the Bank or its affiliates in the past three
years.
* Accepted any compensation from the Bank or its affiliates
during the previous fiscal year (except for board services,
retirement plan benefits, or non-discretionary compensation).
* An immediate family member who is, or has been in the past
three years, employed by the Bank or its affiliates as an
executive officer.
* Been a partner, controlling shareholder or an executive officer
of any for-profit business to which the Bank made or from which
it received, payments (other than those which arise solely from
investments in the Bank's securities) that exceed five percent
of the Bank's consolidated gross revenues for that year, or
$200,000, whichever is more, in any of the past three years.
* Been employed as an executive of another entity where any of
the Bank's executives serve on that entity's compensation
committee.
II. Statement of Policy
-------------------
It is the Committee's responsibility to provide oversight of the Company's
Independent Auditors and Internal Audit function. In so doing, it is the
responsibility of the Committee
to maintain free and open means of communications between the Board of
Directors, the Independent Auditors, the Internal Auditors, and the
financial management of the Bank.
III. Meetings
--------
The Committee shall meet at least four times annually, or more frequently
as circumstances dictate. The Committee will in the normal course meet in a
separate executive session with the Internal Auditors. At least annually,
the Committee will meet with the Independent Auditors to discuss any
matters that the Committee determines should be discussed privately. The
Internal Auditor shall serve as the Clerk of the Committee and keep minutes
of the proceedings of each Committee meeting. A majority of the Committee
shall constitute a quorum for the conduct of business. At the discretion of
the Chairman, a member may attend a meeting by telephone conference in
which he can hear each person in attendance and all such persons can hear
the person attending by telephone conference.
IV. Responsibilities
----------------
1. Review and update this Charter annually and ascertain that it is
reported in the Bank's proxy statement at least once every three
years.
2. Report regularly to the Board of Directors on results of the
following activities:
a) Appointment of the Independent Auditors to audit the financial
statements of the Company and subsidiaries and determination of
the compensation for such services.
b) Approval of all non-audit services to be provided by the
Independent Auditors.
c) Resolution of any disagreements that may arise between the
Independent Auditors and management.
d) Evaluation of the performance of the Independent Auditors and,
where appropriate, recommendation that the Board replace the
Independent Auditors.
3. Review the Independent Auditors' engagement letter setting forth the
scope and approach of the proposed audit, the estimated fees for
performing the annual audit, FDICIA controls audit, and quarterly
reviews of Form 10-Q. The Committee will also meet annually with the
Independent Auditors to review findings, including comments or
recommendations.
4. Review the effectiveness of the Internal Audit function of the Bank
including the independence and authority of its reporting
obligations, the proposed audit plan for the current internal audit
cycle, and the coordination of such plans with the Independent
Auditors.
5. Review with the Independent Auditors and Internal Auditors the
integrity of the
Bank's financial reporting processes and compliance with section 12
USC 1831 p-1 (Federal Deposit Insurance Act).
6. Inquire as to the Independent Auditors' judgments about the quality
and appropriateness of the Bank's accounting principles as applied in
its financial statements.
7. Consider and approve, if appropriate, changes to the Bank's auditing
and accounting principles and practices as suggested by the
Independent Auditors, management or the Internal Auditors.
8. Review and approve the required reports to be included in the Bank's
annual report to shareholders.
9. Review, at the Committee's discretion, quarterly financial statements
and review with management and the Independent Auditors any
significant matters that arise out of the Company's quarterly
financial statements review, based upon the auditors' limited review
procedures. Discuss any significant changes to the Company's
accounting principles and any items required to be communicated by
the Independent Auditors in accordance with SAS 61 as amended by SAS
90.
10. Review and discuss with the Independent Auditors annually all
relationships the Independent Auditors have with the Company which
might adversely affect their objectivity and independence and review
a written statement from the Independent Auditors as to their
independence. The Committee shall take, or recommend that the full
Board take, appropriate action to oversee the independence of the
Independent Auditors.
11. Discuss the results of the audit with the Independent Auditors prior
to releasing the year-end earnings and annual report to regulatory
agencies. Discuss those matters which are required to be communicated
to audit committees in accordance with SAS 61 as amended by SAS 90.
12. It is not the duty of the Audit Committee to plan or conduct audits
or to determine that the Company's financial statements are complete
and accurate and are in accordance with generally accepted accounting
principles. This is the responsibility of Management and the
Independent Auditors.
Other Duties
- ------------
In addition to the foregoing duties, the Committee shall:
1. Appoint and supervise the Internal Audit Director.
2. Review internal and external reports concerning the Loan Review,
Compliance,
and Information Technology functions of the Bank.
3. In consultation with the Board of Directors, review and follow-up on
regulatory examination findings and recommendations.
4. Conduct or authorize investigations into any matters within the
Committee's scope of responsibilities. The Committee is empowered to
retain independent counsel and other professional advisors to assist
in the conduct of any investigation or as may be necessary in the
fulfillment of any of its responsibilities.
5. Establish procedures for complaints regarding accounting, internal
accounting controls, and auditing matters.
6. Establish procedures for confidential, anonymous employee submissions
of concern.
7. Review Internal Audit's adherence to its audit plan and make
adjustments as necessary.
8. Review on an annual basis the Company's insurance policies including,
blanket bond, directors' and officers', and property and casualty.
SLADE'S FERRY BANCORP
SOMERSET, MASSACHUSETTS
Proxy Solicited on Behalf of the
Board of Directors
Annual Stockholders Meeting
April 14, 2003
- ------------------------------------------------------------------------------
The undersigned hereby appoint Donald T. Corrigan, Peter Paskowski, and
Lawrence Oliveira, or any one of them as my/our true and lawful attorney, with
full power of substitution, for me/us and in my/our name to vote, as
designated below, all the shares of common stock of Slade's Ferry Bancorp held
of record by the undersigned on February 21, 2003, at the Annual Meeting of
the stockholders of said Company to be held at the Venus de Milo Restaurant,
75 Grand Army Highway, Swansea, Massachusetts on Monday, April 14, 2003 at
6:30 p.m. or at any adjournment thereof, with all powers I/we should possess
if personally present, hereby revoking all previous proxies.
For Against
- --- -------
[ ] [ ] (1) To elect Thomas B. Almy, Peter G. Collias, Melvyn A.
Holland, Shaun O'Hearn, Sr., and William J. Sullivan
as Class Two Directors for a term of three years.
(Authority to vote for the election of a specifically
named individual may be withheld by crossing out the
name of such individual.)
[ ] [ ] (2) To elect Peter G. Collias as Clerk/Secretary for a
term of one year.
[ ] [ ] (3) To ratify the Board of Directors' selection of
Shatswell, MacLeod & Company, P.C. to continue as our
independent certified public accountants for 2003.
(4) In their discretion, the proxies are authorized to consider and act upon
such other business matters or proposals as may properly come before the
meeting.
- ------------------------------------------------------------------------------
The shares represented by the proxy will be voted as directed by the
undersigned. It is the intention of proxies to vote "FOR" the proposals set
forth under Items 1, 2, and 3 if no contrary instruction is indicated.
- ------------------------------------------------------------------------------
---------------------------------------
Signature Date
---------------------------------------
Signature Date
Please date, sign and return this In signing, please write name(s)
Proxy in the enclosed envelope exactly as appearing in the imprint
promptly. on this proxy. If signing as Executor,
or in any other representative
capacity, or as an officer of a
corporation, please indicate your full
title as such.
[ ] I (we) will attend the meeting.
MAILING INSTRUCTIONS - Fold the form along lines as
indicated and insert in the envelope provided.